Security Analysis & Portfolio Management

Fundamental Analysis

Project Report

On

Subject

Security Analysis and Portfolio Management

Prepared by

Anup Adhikari (02) & Hitesh Chaurasia (12)

MMS – SEM III

Submitted to

Prof. Namrata Acharya

Aditya Institute of Management Studies and Research

Academic Year

2018-2020

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Security Analysis & Portfolio Management

Table of Contents

Sr No. Title Page No.

1 Company’s Background Analysis and Transaction Decision 3-4

2 Promoters and Board of Directors details 4-5

3 Financial Performance 6-9

3.1 Standalone Financials 6

3.2 Ratios 7

3.3 Net Sales Turnover (Rs in Crores) 7

3.4 Valuation and Trend Analysis 8-9

4 SWOT Analysis 9

5 Michael Porter’s 5 Forces Analysis 10

6 Conclusion 10

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 Security Analysis & Portfolio Management

1. Company’s Background Analysis and Transaction Decision

Particulars

Company Name Jubilant FoodWorks Ltd

Industry FMCG (Restaurants)

Founded 16th March 1995

Headquarter Noida, Uttar Pradesh

No.of Outlets 1,232 (2018)

Area Served India, Nepal, Sri Lanka and Bangladesh

Brands Domino's Pizza and Dunkin Donuts

Stock Exchange Listing date 08 February 2010

Offer Price Rs 135.00 - Rs 145.00

Open price on listing date 160.00

Growth since inception (as per market price) 637.50%

Current Market Capitalization 15,597.42 crores

P/E 48.30

Dividend Yield (%) 0.42

Company's income growth (since last 5 years) 71.84%

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 Security Analysis & Portfolio Management

BUY
1. Domino’s pizza unveiled today a new product upgrade which surged its trade.

2. It is clearly seen that in the span of just 9 years company has grown (as per stock price)
637.50%. This states that company has strong fundamentals and great potential in growth
perspective.
3. The company’s potential can also be seen through last 1 year performance as it had
touched the highest price of Rs 1578/-.

4. Company has given a stable dividend of 25% since 2015 to its investors.

5. Investors all around have speculated towards further rise in the price of the stock and have
advised for ‘BUY’ option for the stock.

6. Company’s EPS has increased by 30.66%, since last 5 years. This growth in just span of 5
years shows strong foothold of the company and only directs now to more positive side.

7. It has been analysed by industry experts that global consumption is expected to double to
5.8% by next year 2020.

2. Promoters and Board of Directors details

Promoters No. of Shares hold

Jubilant Consumer Pvt Ltd 5,53,46,483

Hari Shankar Bhartia 2

Shyam Sundar Bhartia 2

Kavita Bhartia 2

Jubilant Securities Pvt Ltd 4

Jubilant Capital Pvt Ltd 2

Shobhana Bhartia 2

JE Energy Ventures Pvt Ltd 0

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Security Analysis & Portfolio Management

Board of Directors
Executive and Non-Executive
Designation Independent Directors
Directors
Mr. Shyam S. Bhartia Chairman & Director Mr. Arun Seth
Co-Chairman & Mr. Abhay Prabhakar
Mr. Hari S. Bhartia
Director Havaldar
Mr. Shamit Bhartia Non-Executive Director Mr. Ashwani Windlass

Ms. Aashti Bhartia Non-Executive Director Mr. Barjis Desai

CEO & Wholetime
Mr. Pratik R. Pota Mr. Pheroz Vandrevala
Director
Ms. Ramni Nirula

Mr. Vishal Marwaha

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 Security Analysis & Portfolio Management

3. Financial Performance

3.1 Standalone Financials

Particulars (Rs in mn) FY19 FY18 Growth (%)

Revenue from Operations (Net) 35,307 29,804 18.5

Other Income 469 227 106.5

Total Income 35,776 30,032 19.1

Raw Material & Provisions Consumed 8,759 7,514 16.6

Personnel Expenses 6,725 6,041 11.3

Rent Expenses 3,411 3,157 8.0

Other Expenses 10,335 8,628 19.8

Total Expenditure 29,229 25,340 15.3

EBITDA 6,078 4,464 36.2

Margins 17.2 15.0

PBT 4,945 3,132 57.9

Margins 14.0 10.5

PAT 3,228 2,064 56.4

Margins 9.1 6.9

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 Security Analysis & Portfolio Management

3.2 Ratios

Ratios Mar-19 Mar-18 Mar-17 Mar-16 Mar-15

EPS (Rs) 24.46 31.29 10.21 17.44 18.82

Dividend/share (Rs) 5.00 2.50 2.50 2.50 2.50

Return on Capital Employed

36.57 28.49 11.92 13.44 16.65
(%)

Return on Assets (%) 16.86 13.16 5.04 9.12 11.26

Asset Turnover Ratio (%) 184.48 190.08 191.13 191.96 189.61

Current Ratio (X) 1.49 1.07 0.57 0.53 0.50

Quick Ratio (X) 1.36 0.94 0.43 0.40 0.38

Inventory Turnover Ratio (X) 48.27 47.62 43.36 44.83 49.06

Earnings Retention Ratio (%) 0.00 92.01 75.53 85.65 88.96

From the above table, it can be clearly understood that company’s performance has been
improved through the last 5 years.

3.3 Net Sales Turnover (Rs in Crores)

Income Mar-19 Mar-18 Mar-17 Mar-16 Mar-15

Net Sales Turnover 3530.67 2980.44 2546.07 2410.21 2074.47

From above table it can be seen that company’s sale has increased by 70.19% in span of 5
years.

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 Security Analysis & Portfolio Management

3.4 Valuation and Trend Analysis

Source: https://www.smart-investing.in/main.php?Company=JUBILANT+FOODWORKS+LTD

Above pictures shows Fundamental scores and JBL’s performance compared to its competitors. We
can see that compared to its peers, JBL has shown highest growth. Below fundamentals we can see
Valuation, where ratios has been mentioned and the increase in its market capitalization since 2010.
Lastly we can see Intrinsic value of the company.

Source: https://www.edelweiss.in/quotes/equity/jubilant-foodworks-ltd-14548

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 Security Analysis & Portfolio Management

From above graph, we can see that since its listing (Jubilant Foodworks Ltd) in 2010 has
followed an uptrend. The graph is showing a trend of higher highs and lower lows. We know
that it was listed at a price of Rs 160/- and now after almost reaching a decade its last traded
price was Rs 1250/- a total of 681% increase.

Source: https://walletinvestor.com/bse-stock-forecast/jubilant-foodworks-ltd-bse-prediction

The above graph shows the forecast trend line of Jubliant FoodWorks Ltd. It has been predicted
that the share price will go as high as Rs 1750/- in matter of 2 years and in 5 years it will be having
a touch point of around Rs 3000/-.

Above data clearly shows positive note on the aspects of market price of the share, which indicates
that it has been predicted that the stock will show an increase of more 140% in next five years
from today’s Last Traded Price, hence it will be a wealth making stock, so highly recommended for
“Buy” for long-term purpose.

4. SWOT Analysis

Strengths Weakness Opportunities Threats

• Good business • Weak Same store • New services and • Lease and Rental
model. sales. consistency negotiations.
unmatched by
• Fair valuation at • Resignations of peers. • Wage hikes.
current levels. CEO & CFO.
• Expansion of new • Heavy
• Good growth in • Operating stores. competitions with
online orders. margins under peers.
pressure. • New product
launches.

Source: http://justrange.com/blog.php?na=Jubilant%20Foodworks%20-%20SWOT&id=34

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 Security Analysis & Portfolio Management

5. Michael Porter’s 5 Forces Analysis

Forces Intensity Comments

JBL’s brand Domino’s Pizza has high competition from other
brands like Pizza Hut, Smokin Joe, Gracia etc. However, it has
created a unique position of “guaranteed delivery in 30 minutes”
which helped to wither the competition to some extent. In the
Degree of Rivalry High
delivery market it has a command of 65% market share, as it was
the first mover and enjoys sizable brand recall. It positioned itself
on the affordability platform as its lowest pizza priced at Rs 39.
But still, its competitive intensity still stands high.
Entry barriers stands to be low other than products introduction
that suits Indian palate. KFC was the first MNC brand to enter
Threat of Entry High
India in 1995 which was followed by influx of other QSR brands
such as Domino’s and McDonald’s.
Right from road size eateries to sophisticated dine-ins and other
Threat of
High national lower-priced fast-food chains such as McDonalds, KFC
Substitutes
all pose as strong substitutes for pizzas.

Buyer Power Medium Bargaining power of buyers is medium to low in case of pizzas.

JFL centrally sources all its raw material requirements, thus

commanding significant bargaining power over its suppliers.
Supplier Power Low
Economies of scale come into play as bulk orders are placed with
various suppliers.
Source: https://www.way2wealth.com/reports/RR251120103.PDF

6. Conclusion

Seeing the current and future growth potential of the company based on its share price, ratios,
forecasts and other fundamental aspects, Investors are on highly positive note for “Buying”
decision of the said stock for long-term wealth accumulation. Hence “BUY” decision of
Investors of this stock will gain fruitful results in their portfolio.

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